#1Melrose Buy Improve Sell > Melrose Industries PLC Full Year Results Year ended 31 December 2022 2 March 2023 Strictly private and confidential HOUTE#2Disclaimer This presentation has been prepared by or on behalf of Melrose Industries PLC ("Melrose"). The information set out in this presentation is not intended to form the basis of any contract. By attending (whether in person, by telephone or webcast) this presentation or by reading the presentation slides, you agree to the conditions set out below. This presentation (including any oral briefing and any question-and-answer session in connection with it) is for information only. The presentation is not intended to, and does not constitute, represent or form part of any offer, invitation, inducement or solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in the US or any other jurisdiction. Securities may not be sold in the U.S. absent registration or an exemption from registration. This presentation must not be acted on or relied on in connection with any contract or commitment whatsoever. It does not constitute a recommendation regarding any securities. Past performance, including the price at which Melrose's securities have been previously bought or sold and the past yield on Melrose's securities, cannot be relied on as a guide to future performance. Nothing herein should be construed as financial, legal, tax, accounting, actuarial or other specialist advice. The release, presentation, publication or distribution of this presentation in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements. It is your responsibility to satisfy yourself as to the full observance of any relevant laws and regulatory requirements. Any failure to comply with applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. In addition, in the United Kingdom, this presentation is being made available only to persons who fall within the exemptions contained in Article 19 and Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"). This presentation is not intended to be available to, and must not be relied upon, by any other person. Nothing in this presentation constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. None of Melrose, its shareholders, subsidiaries, affiliates, associates, or their respective directors, officers, partners, employees, representatives and advisers (the "Relevant Parties") makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this presentation, or otherwise made available, nor as to the reasonableness of any assumption contained in such information, and any liability therefor (including in respect of direct, indirect, consequential loss or damage) is expressly disclaimed. No information contained herein or otherwise made available is, or shall be relied upon as, a promise, warranty or representation, whether as to the past or the future and no reliance, in whole or in part, should be placed on the fairness, accuracy, completeness or correctness of such information. Unless expressly stated otherwise, no statement in this presentation is intended as a profit forecast or estimate for any period and no statement in this presentation should be interpreted to mean that cash flow from operations, free cash flow, earnings or earnings per share for Melrose for the current or future financial years would necessarily match or exceed the historical published cash flow from operations, free cash flow, earnings or earnings per share of Melrose. Statements of estimated cost savings relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, any cost savings referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. By attending the presentation to which this document relates and/or by accepting this document you will be taken to have represented, warranted and undertaken that you have read and agree to comply with the contents of this notice. This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Melrose. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Melrose to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions including as to future potential cost savings, synergies, earnings, cash flow, return on average capital employed, production and prospects. These forward-looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "objectives", "outlook", "probably", "project", "will", "seek", "target", "risks", "goals", "should" and similar terms and phrases. There are a number of factors that could affect the future operations of Melrose and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) changes in demand for Melrose's products; (b) currency fluctuations; (c) loss of market share and industry competition; (d) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; and (e) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as at the specified date of the relevant document within which the statement is contained. Melrose does not undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. Certain financial data has been rounded. As a result of this rounding, the totals of data presented in this presentation may vary slightly from the actual arithmetic totals of such data. Melrose Buy Improve Sell 2#3Contents Melrose Buy Improve Sell 1 Introduction 2 The shape of the two groups post demerger 3 Full year results: Group 4 Full year results: Businesses 5 Appendices The revenue and profit numbers included in this presentation are shown in round millions and unless otherwise stated growth metrics are at constant currency 3#4Melrose Buy Improve Sell Introduction 4#5Introduction ■ ■ ■ ■ A very encouraging set of results - recovery is happening across the Group Demerger is on track and the split is well positioned and financed Dowlais¹ is set up to produce good returns for shareholders in these results we are focusing on Melrose Melrose has an exceptional Aerospace business Engine RRSPs² are a huge "hidden" upside Performance in 2023 and beyond, significantly better than expectations This is one of the best businesses we have owned Melrose Melrose's focus for the next 12 months is completing the restructuring programmes and demonstrating the quality of the Aerospace business Justin Dowley, Chairman of Melrose Industries PLC, today said: "We are delighted with these results, and everything is on track for the demerger. We consider a restructured Aerospace business to be one of the best businesses Melrose has ever owned. We are confident that a combination of restructured and refocused high class Engines and Structures businesses, and overall aerospace market recovery, positions these businesses for a significantly better than expected performance in 2023 and beyond." Buy Improve Sell 1. 2. № Comprises the Automotive, Powder Metallurgy and Hydrogen businesses Risk and Revenue Sharing Partnerships 5#6Buy Improve Sell Melrose The shape of the two groups post demerger Five summary slides. 6#71. 2022 Results: better than signalled in September Melrose Buy Improve Sell Both groups well positioned ahead of the proposed demerger 1. 2. 3. 4. 5. Melrose (Aerospace) pre-PLC costs £m Revenue EBITDA (pre-PLC costs) EBITDA margin % Operating profit (pre-PLC costs) Operating profit margin % Proforma PLC costs4 Adjusted ¹ Results 2022 2,957 330 11.2% 186 6.3% Growth vs 2021 11% 19% 1.1ppts 51% 1.9ppts (46) £10m less Aerospace experienced strong momentum and market recovery in 2022 with a continued positive outlook for 2023 of c.15% + blended market growth 5 Dowlais² pre-PLC costs £m Revenue EBITDA ³ (pre-PLC costs) EBITDA³ margin % Operating profit (pre-PLC costs) Operating profit margin % Proforma PLC costs Adjusted ¹ Results 2022 Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Comprises the Automotive, Powder Metallurgy and Hydrogen businesses Including depreciation and amortisation from equity accounted investments Proforma PLC costs of £36 million and £10 million of non-cash divisional LTIP charge Sources for volume growth: S&P global light vehicle production forecast (January 2023) for Dowlais; Cirium, Teal and US DoD for Aerospace 5,234 620 11.8% 332 6.3% Growth vs 2021 7% 7% (30) Dowlais2 results are slightly above the top end of the range indicated previously for 2022. The market outlook for 2023 is c.3% volume growth 5 Flat 24% 0.9ppts £30m more 7#82. Revenue growth and outlook Melrose Both groups' end markets are growing 1. Buy Improve 2. Sell 3. Melrose (Aerospace) 15%+ Current external market data² 11% VS Actual revenue growth (2022) Outlook for growth in 2023 10% Current analysts' consensus ³ for Melrose c.3% Current external market data² Dowlais 1 7% VS 6% Current analysts' consensus ³ for Dowlais 1 Some rebalancing of consensus³ outlook required to match latest market expectations Comprises the Automotive, Powder Metallurgy and Hydrogen businesses Sources for volume growth: S&P global light vehicle production forecast (January 2023) for Dowlais; Cirium, Teal and US DoD for Aerospace This is not a Melrose forecast, it is a company compiled consensus (February 2023) from 13 external analysts that cover Melrose 8#93. On track to achieve adjusted ¹ operating margin targets Melrose Significant upside to come 1. Buy Improve 2. Sell 3. Melrose (Aerospace) 6.3% 2022 11.2% 2022 Margin targets pre-PLC costs Operating margin EBITDA margin 14% + Target 18% + Target 6.3% 2022 11.8% 2022 Dowlais 2 Operating margin EBITDA margin Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Comprises the Automotive, Powder Metallurgy and Hydrogen businesses Including depreciation and amortisation from equity accounted investments 11% + Target 16% + Target 9#104. Net debt¹ and leverage¹: both businesses sensibly positioned Melrose Proforma net debt at demerger 1. 2. Buy Improve 3. Sell 4. 5. 6. Net debt¹ at 31 December 2022 £1,139m Leverage¹ 1.4x Demerger costs² c.£70m c.£0.45bn Net Debt Melrose (Aerospace) UK pension buyout fee 3,4 c.£45m c.1.7x Leverage 5 2nd interim dividend payment³ c.£60m Proforma net debt of the combined Group at demerger is expected to be c.£1,315 million; c.1.6x leverage 5 Proforma net debt at demerger c.£1,315m c.£0.85bn Net Debt Leverage5 1.6x Dowlais 6 Melrose (Aerospace) keeps c.£0.45 billion of net debt; c.1.7x leverage 5 Dowlais opens with c.1.5x leverage5; £0.85 billion of net debt c.1.5x Leverage 5 Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Included in the Melrose proforma net debt shown in the demerger circular Not included in the Melrose proforma net debt shown in the demerger circular, but announced post year-end Agreed a buyout of one of the two UK Pension Plans within Aerospace, for c.£45 million, with a pension annuity provider (more details included in the appendix) Leverage per the new bank facility documents, calculated using the last twelve months adjusted EBITDA to 31 December 2022, including proforma central costs Comprises the Automotive, Powder Metallurgy and Hydrogen businesses 10#115. Interest and adjusted¹ tax rates Melrose Other information 1. Buy Improve 2. Sell 3. Interest cost for the new bank facilities Adjusted ¹ tax rate Melrose (Aerospace) c.5.5% ³ c.21% Dowlais² c.5.5% 3 c.24% Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Comprises the Automotive, Powder Metallurgy and Hydrogen businesses Interest cost of drawn gross debt, further information on non-drawn debt and non-cash interest is shown in appendix slide "Some helpful data for 2022" 11#12Buy Improve Sell Melrose Full year results: Group Group highlights and cash generation 12#13Highlights Melrose Continuing operations Revenue Operating profit/(loss) Profit/(loss) before tax Diluted earnings per share Net debt¹ Leverage ¹ Dividend Group ■ I ■ Adjusted¹ results 2022 £m 8,191 480 384 7.0p 1. Buy Improve 2. Sell 3. 1,139 1.4x 2.325p 2021² £m 7,263 317 194 3.1p 950 1.3x 1.75p Statutory results 2022 £m 7,537 (236) (307) (5.4)p n/a n/a n/a 2021² £m 6,650 (493) (660) (10.3)p n/a Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Restated following the disposal of Ergotron Comprises the Automotive, Powder Metallurgy and Hydrogen businesses n/a Melrose traded ahead of expectations in 2022 on sales growth, profit and cash generation The Group recorded an adjusted¹ earnings per share of 7.0 pence (2021: 3.1 pence), 126% higher than last year. The statutory loss per share was 5.4 pence (2021: 10.3 pence) n/a Cash generation exceeded expectations, with a particularly strong second half performance, and therefore Group net debt¹ of £1.14 billion was lower than expected The timetable for the demerger of the Dowlais Group 3 is on track, with completion expected on 20 April 2023, subject to shareholder approval on 30 March 2023. Documents are expected to be published for this tomorrow Melrose will hold an Investor Event for Aerospace on Wednesday 17 May in London A second interim dividend of 1.5 pence (50% increase on last year's final dividend) will be paid on 18 April just prior to the proposed demerger. This will replace the final dividend which would normally be approved at the 2023 AGM. The total full year dividend for 2022 is 2.325 pence (33% increase on last year) 13#14Reconciliation between statutory and adjusted ¹ results Melrose Continuing operations £m Statutory operating loss Amortisation of intangible assets acquired in business combinations Restructuring costs Exchange movements not hedge accounted Net release of fair value items Other Adjustments to statutory operating loss Adjusted ¹ operating profit Continuing operations Statutory revenue Share of equity accounted investments Adjusted¹ revenue Statutory results ▪ The IFRS measure of results includes certain items which are significant in size or volatility or by nature are non-trading or non-recurring, or are items released to the Income Statement that were previously a fair value item booked on an acquisition Adjusted results The Melrose Board considers the adjusted results to be an important measure to monitor how the businesses are performing because they achieve consistency and comparability when all businesses are held for the complete reporting periods ■ Buy Improve Sell 1. 2. Restructuring costs £m Aerospace Dowlais² Corporate Total Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Comprises the Automotive, Powder Metallurgy and Hydrogen businesses Total (236) 458 144 87 (26) 53 716 480 Income Statement charge 88 54 2 144 Cash spent/ (received) 2022 136 (25) 111 £m 7,537 654 8,191 Cash spent in year 51 83 2 136 14#15Melrose Group cash generation Melrose Free cash flow 1 Cash flow £m Adjusted EBITDA ³ Lease obligation payments Non-cash impact from loss-making contracts Movement in working capital Adjusted operating cash flow (pre-capex) Net capital expenditure Defined benefit pension contributions - ongoing Trading net other Dividend income from equity accounted investments Restructuring Cash generated before interest and tax Net interest and net tax paid Cash flow from operations discontinued in the year Free cash flow 1 Adjusted free cash flow ¹ ■ Buy Improve Sell 123 2022 2022 Melrose² Dowlais 2 3. 293 (29) (24) (147) 93 (72) (23) 58 (53) 3 515 (22) (16) (31) 446 (222) (36) (15) 59 (83) 149 2022 Group 808 (51) (40) (178) 539 (294) (59) 43 Year end net debt¹ of £1.14 billion, better than expectations Particularly strong cash generation in the second half of the year 59 (136) 152 (175) 15 (8) 128 Reconciliation of net debt¹ £m Net debt¹ brought forward Adverse foreign exchange and other non-cash movements Net cash flow from acquisition and disposal related activities Free cash flow¹ in the year Dividends paid to shareholders Buy back of own shares Net debt¹ 31 December 2022 Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Melrose includes Aerospace and the continuing central cost centre; Dowlais comprises the Automotive, Powder Metallurgy and Hydrogen businesses Calculated excluding EBITDA from equity accounted investments 2022 Group (950) (61) 461 (8) (77) (504) (1,139) 15#16Melrose Aerospace: long-term cashflow dynamics GKN Aerospace: Engines' estimated RRSPS cash profile¹,2 from 1980 to 2060 Melrose I ■ I I £m Buy Improve Sell 700 1. 2. 600 3. 4. 500 400 300 200 100 0 -1001980 Orders 3 (cash inflow) Forecast orders4 (cash inflow) Investment (cash outflow) Significant upturn in cash flow underway Aerospace is in an extraordinarily attractive position for investors It is forecast to have strong and relatively predictable cash inflows which will grow materially There is limited future work required by Melrose (Aerospace) after sale of the engine to achieve these cashflows, so margins become high and are coming in to view 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Relatively small amount of advance payments are received to complicate long-term cashflow dynamics The £18.5 billion¹ net cash inflow, as presented at the previous GKN Aerospace Capital Markets Event on 8 June 2022, is based on customer projections for engine sales with many already in flight 2045 2050 2055 2060 The upcoming Aerospace investor event on 17 May 2023 will show an updated RRSP cash profile and give more detail on the full profit and cash potential Using a foreign exchange rate of USD GBP 1.3:1 Pre-tax and excluding a nominal amount of maintenance capex Orders include aftermarket on delivered engines and both the original equipment sale and associated aftermarket of published engines orders. Forecast orders represent the original equipment sale and associated aftermarket of expected future engine orders on current programmes 16#17Buy Improve Sell Melrose Full year results: Businesses Positive momentum and strong platform for value creation 17#18Dowlais 1 1. 2. Comprises the Automotive, Powder Metallurgy and Hydrogen businesses Based on 2022 adjusted revenue for all continuing businesses GKN 16 64% of Melrose² 18#19Dowlais¹: overview Adjusted ² results pre-PLC costs Continuing operations £m Melrose Automotive Powder Metallurgy Other Industrial Total Automotive Powder Metallurgy ■ ■ 2022 Revenue 4,211 1,022 Buy Improve 1. Sell 2. 1 5,234 2022 Operating profit/(loss) 250 96 (14) 332 2022 Operating margin 5.9% 9.4% 6.3% 2021 Revenue 3,745 975 4,720 2021 Operating profit/(loss) 172 91 (7) 256 2021 Operating margin 4.6% 9.3% 5.4% Sales growth of 9%, boosted by material surcharges and inflation recovery; volumes up 4% on 2021 38% increase of operating profit, margins up 130bps to 5.9% as benefits from business improvements are realised Very strong bookings - over £5 billion, book-to-bill ratio 128%, pure EVs at 42% of bookings Flat sales with material surcharges and inflation recovery; volumes down 5% Strong operational performance driving higher profits and improved profitability despite lower volume Good progress in electrification with new EV component wins and eMagnet development Strong cash generation from disciplined working capital management Hydrogen business in start-up phase with a healthy commercial pipeline and operating pilots across the globe Strong margin progression from good operational performance and restructuring, inflation headwinds fully offset Comprises the Automotive, Powder Metallurgy and Hydrogen businesses Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance 19#2099 GKN Aerospace 1. Based on 2022 adjusted revenue for all continuing businesses 0000 ..... 300000 ******** 36% of Melrose¹ 20#21Aerospace results: overview Melrose £m Revenue EBITDA EBITDA margin % Operating profit Operating margin % 3 2 Buy Improve. 1. Sell 2. Adjusted ¹ results 2022 1 2,957 330 11.2% 186 6.3% Revenue by business Growth vs 2021 1 Civil (37%) 2 Engines (34%) 3 Defence (29%) 11% Balanced portfolio, well positioned for narrow body recovery and business jet growth 19% 1.1ppts 51% 1.9ppts 8 · I Sales up 11% versus 2021 and civil market recovery gaining momentum Strong H2 performance leading to 51% increase in 2022 adjusted¹ operating profit Continued excellent progress and performance in world-class Engines business, including RRSP growth Civil structures ramping up well to meet higher OEM build rates; Defence structures demand positive with further operational improvement to come All required major restructuring projects to reach 14% + operating margin target are well underway, substantially complete by end of 2023 Revenue by customer 1 3 2 1 Airbus 2 Pratt & Whitney 3 Lockheed Martin 4 Boeing 5 GE 6 Sikorsky 7 Rolls-Royce 8 Other Broad and diverse global OEM customer base 3 Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance According to manufacturing country of origin 2 4 Revenue by region² 1 1 Europe (exc UK) (44%) 2 North America (33%) 3 UK (19%) 4 Asia (4%) Providing vital technology to an enviable portfolio of global customers 21#22Aerospace results: 2022 highlights Melrose Market recovery gained momentum Fast recovery in air travel; very strong demand for civil narrow body aircraft and engine maintenance Industry became supply constrained due to post-pandemic supply chain issues and labour shortfalls Business improvements delivering benefits Operations: 23% improvement in customer quality; deliveries under tight control with reduction in arrears Restructuring: significant projects underway in Europe and North America; on track to be substantially complete in 2023 Good commercial progress across portfolio I ■ 1 Continued expansion of design to build business e.g. new structural components on Gulfstream G800/G400; F-35 and Black Hawk multi-year extensions Ongoing customer dialogue to address non-core or unprofitable contracts Ongoing investments in proprietary technology Excellent progress on breakthrough technologies for existing aircraft, including AM, fan blade repair and advanced composites Produced largest ever AM aerostructure component; launched new AM Centre of Excellence in Texas Major contributor to next generation aircraft including electric, hydrogen and eVTOL platforms (e.g. Eviation Alice and Vertical) ■ I ■ ■ Excellent additive manufacturing (AM) momentum in Engines, including new key OEM agreements and Permanova acquisition to increase technology capability and accelerate growth Buy Improve Sell 22#23Aerospace: positive earnings momentum Full-year revenue² Melrose Adjusted ¹ operating margin (%) 10.6% 2019 £3.4b Buy Improve 1. Sell 2. 1 0.5% 2020 £2.4b 2 4.4% 2021 £2.3b 3 6.3% 2022 £2.7b 14% + Target 1 2 3 4 Achieved breakeven on 27% lower sales ■ Immediate actions to reduce costs based on lower demand Delivered 390bps operating margin expansion on broadly flat sales Accelerated restructuring and focused cost reduction ■ Margin expansion of 190bps on 11% sales growth Ramping up production while overcoming challenging supply chain Extensive restructuring and operational improvements underway W " Clear path to 14% + operating margin target Increased confidence in market recovery, platform position and business improvements ▪ Encouraging pace of impacts expected to read through ■ On track to achieve margin target with increased pace Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Total revenue adjusted for divestments of Fokker Services, Fokker Techniek and Santa Ana and the future site closure of St Louis 23#24Aerospace: Leading global Tier 1 technology supplier Melrose Onboard 90% KAKAK 1. Buy Improve 2. Sell 3. 4. of commercial aircraft made today¹ M >10% Sales CAGR to 2025 £ >70% Revenue from sole source positions -£18.5bn Cash flows expected from RRSPs³ alone 7 % 95% Industry leading position # 1, 2 or 3 globally² £100m joint investment in sustainable technology 4 On track to significantly exceed expectations in 2023 and beyond GKN Aerospace engine or airframe content onboard aircraft over 100-person capacity produced today Leadership position means number 1, 2 or 3 in the global market, by sales, in aerostructures, aerospace engine systems and aerospace electrical distribution Risk and Revenue Sharing Partnerships on OEM engine platforms as presented at Capital Markets Event in June 2022 Figure relates to GKN Aerospace plus external funding for sustainable aviation facilities and programmes since 2020 24#25Aerospace: compelling outlook Melrose Buy Improve 1. Sell Structurally growing market with faster near-term recovery 6 2 Sole source Tier 1 technology positions on world leading high-volume platforms 3 Excellent Engines business with differentiated technology IP, growing aftermarket and unique RRSPs¹ portfolio entering "sweet spot" Differentiated Structures business ramping up fast with deep design and manufacturing capability 5 Good momentum on business improvements with significant further gains to come Exceptional financial potential from revenue growth, margin expansion and cash generation Risk and Revenue Sharing Partnerships on OEM engine platforms 25#26Million 250 ■ Aerospace outlook: structurally growing market ■ ■ Flight hours returning strongly 22-25 CAGR: 12% 200 150 100 50 0 2018 2019 2020 2021 2022 Melrose 2023 Source: Cirium ■Narrow body ■Wide body 2024 2025 Buy Improve 1. Sell 2026 2027 2028 Global air traffic ramping up further as China reopens H1 2023 Strong 'bounce back' in passenger demand in 2021/22 2029 Recovery to 2019 levels now expected in late 2023/early 2024 2030 ■ Airlines broke revenue records in summer 2022, despite struggling to meet demand due to aircraft and staff shortages Estimated US procurement spend in $billion 2500 2000 1500 OEM deliveries ramping up fast 22-25 CAGR: 17% 1000 ■ ■ ■ ■ 500 Source: Teal 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Narrow body ■Wide body 2028 2029 2030 Strong demand for new aircraft from airlines as travel ramps up on ageing fleet Combination of COVID and 737 MAX issues resulted in >2,500 fewer aircraft produced in last 4 years OEMs struggling to meet demand as supply chain and labour issues pace production ramp-up Backlogs range between 5 and 8 years with narrow body now -11,000 aircraft 200¹ 190 180 170 160 150 140 130 120 ■ ■ I Defence spending increasing 22-27 CAGR: 4% III 2019 2020 2021 2022 2023 2024 2025 2026 2027 Source: US DoD, estimates only published until 2027 Forecast sustained growth in Western government defence spending Underpinned by heightened geopolitical uncertainty and near peer threat Political focus on increased NATO budget after years of under investment v GDP Strong demand for established platforms e.g. F-35 booking slots beyond 2030, plus new technologies 26#27Narrow body Wide body Defence Aerospace outlook: established platform positions GKN position on world's highest volume platforms Melrose A3204 B737 A350 B787 F-35 H-605 Buy Improve. Sell 1. 2. 3. 4. 5. Expected production to 20301 6,915 4,315 888 798 1,360 417 Engine position ² ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Structures position 2,3 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓✓✓ Source: Teal Relative to GKN total addressable technology stack Structures includes Civil and Defence segments Illustrative examples of content and value Relates to A320 family including A319, A320 and A321 Includes Sikorsky Black Hawk Engine: P&W GTF (cornerstone of narrow body power) ● ● . Civil structures: Airbus 320 (leading narrow body aircraft) Highest global backlog at ~6,000 aircraft GKN supplies wing and empennage structures, wiring and cockpit windows Approx. £420k content per aircraft ● ● Powers A320/A220 aircraft, already on 1,100+ aircraft GKN supplies fabricated structures with engine mounts and is an established part of P&W repair network 4% and 7% RRSP position on two variants Defence structures: F-35 (leading global 5th gen fighter jet) Production slots booked from 17 nations out to 2030 GKN supplies: metallic/composite structures, electric wiring, landing gear and canopies Approx. $2.5 million content per aircraft ● ● Design to build focus with >70% sole source portfolio 27#28Aerospace outlook: exceptional RRSP contribution RRSP structure GKN position Melrose Buy Improve Sell GKN has established portfolio of 19 RRSPs on leading engine platforms. Revenue ■ Revenue and cashflows shared through full engine programme life cycle ~ typically 40 years+ Includes initial investment costs through to participation in profitable aftermarket GKN's unique portfolio entering financial "sweet spot" following initial investment phase Risk Partners also share risk of engine through lifecycle Risks include initial development success, engine sales and engine performance/warranty Risks limited at this stage as engines stable with strong demand; outstanding risks reduce further over time Sharing I OEM has majority share and selects technology partners to participate in engine programmes Typically percentage share of programme is linked to value of technology contribution provided GKN program me shares are up to 7% on many of the world's leading aerospace engines RRSP portfolio is strong, diverse and well positioned Partnership I Nature of engine development means deep partnership required as teams integrate complex engineering over many years ■ OEMs only allow RRSP partnership with trusted, highly capable innovators with strong technology Deep trusted relationship with all major OEMs with ongoing technology work, including next gen concepts 28#29Aerospace outlook: exceptional RRSP contribution. Technology Product development¹ development 7 years 7 years Investment Melrose RRSP portfolio entering "sweet spot" of engine lifecycles Buy Improve 1. Sell 2. OE production 15 years Aftermarket services 30 years Secured aftermarket 19 x RRSPS ■ Initial scoping work underway on next generation engines, including GTF and CFM RISE Based on firm orders and customer projections ▪ Initial heavy investment phases of technology and product development substantially complete ■ All 19 RRSP engines are launched and operating successfully ■ ▪ GKN to benefit from increasing OEM aftermarket cashflows on engines already produced ■ Most RRSP engines are mature, stable and with proven performance Strong firm and forecast bookings for engine deliveries for 20 years+² Aftermarket profits and cashflows to last 30 years+ 17 of 19 RRSPs in cash generation phase 29#30Aerospace outlook: exceptional RRSP contribution Hab Melrose GKN technology requires limited work after engine produced Buy Improve Sell Fan Case Mount Rings Forward Engine Mount and Compressor Frame Fan & Compressor Spools & Discs GKN AEROSMICE Low Pressure Turbine Cases Rear Engine Mount and Turbine Frame Low Pressure Shafts ■ ■ ■ GKN components on RRSP engines typically last for full engine lifetime GKN technology requires limited work after engine produced On wing performance well proven on majority of GKN's portfolio of RRSP engines Outstanding risks mainly relate to potential technical issues and overall programme performance ▪ GKN uses conservative accounting assumptions to recognise unbilled work done Components typically last full engine life 30#31Aerospace outlook: business transformation well underway Restructuring Operational excellence Commercial & Technology Melrose Buy Improve 1. Sell ■ ■ ■ ■ ■ ■ Completed 14 sites closed or sold where non-core/unprofitable Key project milestones in the USA, NL and Nordics Product Centres of Excellence launched Customer quality improved by 23% and arrears down in 2022 despite supply chain issues Lean Operating Model driving productivity gains Gains in working capital from improved debtor and creditor management Actions taken to address legacy onerous contracts and exit low margin work Focusing on higher margin "design to build" positions and growth in aftermarket and repair Selective investment in hydrogen, electric and eVTOL Expected incremental savings as outlined in June 2022 Capital Markets Event I ■ ■ ■ ■ ■ ■ To follow All required projects to be substantially complete by the end of 2023 Completion of current programmes will result in footprint down from 52 to 33 manufacturing sites Cost of poor quality to be further reduced as processes improve further Continuous improvement and benefits from productivity as volumes increase Further working capital gains from inventory reduction More benefits to follow from commercial actions, plus ongoing offsetting of inflation Procurement improvements and supplier consolidation £50m ¹ £50m ¹ Growth and margin expansion from technology insertion on existing platforms £45m ¹ 31#32Aerospace outlook: summary 1 2 3 5 Melrose A compelling equity story... Structurally growing market with faster near-term recovery Sole source Tier 1 technology positions on world's leading high-volume platforms Excellent Engines business with differentiated technology IP, growing aftermarket and unique RRSP portfolio entering "sweet spot" Differentiated Structures business ramping up fast with deep design and manufacturing capability Good momentum on business improvements with significant further gains to come Exceptional financial potential from revenue growth, margin expansion and cash generation Buy Improve 1. Sell Capital Markets Event scheduled for 17 May 2023 H H ■ ...further details to follow at May CME¹ Split of Aerospace by 'Engines' and 'Structures' with associated financials: Growth, EBITDA and profit Cash generation Specific mid-term financial targets Further details on platform positions, technology stack and growth exposure Deep-dive on GKN RRSPs including programme lifecycles and economics ▪ Case studies on Engines' additive manufacturing and Structures' advanced composites ▪ Future technology and sustainability roadmaps 32#33Melrose Buy Improve Sell Appendices 33#34Business results Adjusted¹ results Continuing operations Melrose £m Aerospace Dowlais² Central Total I Aerospace Dowlais ² Buy Improve Sell 2022 Revenue 2,957 5,234 8,191 1. 2. 2022 Operating profit/(loss) 186 332 (38) 480 2022 Operating margin 6.3% 6.3% 5.9% 2021 Revenue 2,543 4,720 7,263 2021 Operating profit/(loss) 112 256 (51) Group results reflect very strong H2 performance; 2022 adjusted operating profit up 41%, margins increased 150bps Continued strong cash generation from improved profits and working capital inflow in H2 317 2021 Operating margin 4.4% 5.4% 4.4% Revenue up 11% as civil market recovery gains momentum Adjusted operating profit up 51% and margins increased by 190bps to 6.3% Improvements in product quality and progress made on restructuring with significant further gains to come Revenue up 7%, boosted by pricing and material surcharges, volumes up 2% Adjusted operating profit up 24% and margins increased by 90bps to 6.3% Margin progression from good operational performance and restructuring, whilst fully offsetting inflation headwinds Ongoing margin improvement as markets recover and improvement actions read through Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Comprises the Automotive, Powder Metallurgy and Hydrogen businesses 34#35Pensions Melrose Buy Improve Sell Protecting members by further de-risking Aerospace UK pension plan ■ ■ Aerospace UK pension plan transferred to annuity provider Plan assets at 31 December 2022 Plan liabilities at 31 December 2022 Plan surplus at 31 December 2022 £m 485 (433) 52 Trustees of one of the two UK pension plans in Aerospace have signed a contract with a pension annuity provider to fully secure benefits for all members Cost to buyout the pension plan is c.£45 million Since acquiring GKN, in total Melrose has entered into contracts to buyout over £0.8 billion of pension liabilities with insurers 35#36New bank facilities Melrose Melrose Bank Facilities c. £1.55bn² multi-currency unsecured facility Guaranteed by various group companies 3-5 year RCF³ 3 year Term loan US$300m €100m Buy 1. Improve 2. Sell 3. 130bps 3 year RCF US$250m Opening margin on drawn debt 130bps Financial covenants US$550m €300m £300m Leverage Interest cover 155bps Max 3.5x Min 4.0x Dowlais¹ Bank Facilities Comprises the Automotive, Powder Metallurgy and Hydrogen businesses FX rates used for translating amounts into GBP are 1.21 for GBPUSD and 1.13 for GBPEUR 3 year facility can be extended for two one-year periods at the company's option c. £1.8bn² multi-currency unsecured facility Guaranteed by various group companies 3 year Term loan US$400m €100m £100m US$660m €450m £350m Opening margin on drawn debt 140bps 160bps 3-5 year RCF3 Financial covenants Leverage Interest cover Both facilities' terms based on tried and tested Melrose facility Max 3.5x Min 4.0x 36#37Some helpful data for 2022 Melrose Continuing operations Item Income Statement Adjusted ² revenue Adjusted² operating profit (pre-PLC costs) Adjusted² EBITDA³ (pre-PLC costs) PLC costs Adjusted effective tax rate Interest cost of gross drawn debt Commitment fee on undrawn debt Other Interest: Amortisation of financing fees Pension Leases Unwind of discount Non-controlling interest charge Cash Flow Depreciation: Owned assets Leased assets (pre-PLC) Equity accounted investments Total depreciation³ Net capital expenditure Restructuring Defined benefit pension contributions Tax Adjusted² operating profit from equity accounted investments Dividend Income from equity accounted investments Buy Improve Sell Melrose 234 £8,191 million £518 million £950 million (£38 million) 4 c.22% c.4.0% c.0.4% (£10 million) (£5 million) (£9 million) (£2 million) (£5 million) £360 million. £45 million £27 million £432 million (£294 million) (£136 million) (£59 million) (£80 million) £78 million £59 million Proforma post-demerger Melrose (Aerospace) £2,957 million £186 million £330 million (£46 million) 4 c.21% c.5.5% c.0.6% (£5 million) Nil (£3 million) (£1 million) Nil £123 million £21 million Nil £144 million (£72 million) (£53 million) (£23 million) (£7 million) Nil Nil 1. Comprises the Automotive, Powder Metallurgy and Hydrogen businesses 2. Described in the glossary to the Preliminary Announcement and considered by the Board to be a key measure of performance Including depreciation and amortisation from equity accounted investments PLC costs in 2022 of £35 million and £3 million of non-cash divisional LTIP charge; proforma PLC costs in Melrose (Aerospace) include £10 million of non-cash divisional LTIP charge Dowlais ¹ £5,234 million £332 million £620 million (£30 million) c.24% c.5.5% c.0.6% (£5 million) (£5 million) (£6 million) (£1 million) (£5 million) £237 million £24 million £27 million £288 million (£222 million) (£83 million) (£36 million) (£73 million) £78 million £59 million 37